Social Security - Review Questions Flashcards
In what circumstances would a child (under age 18 and unmarried) receive Social Security benefits? (Check all that are true.)
1) Parent is disabled
2) Parent has passed away
3) Parent has retired
4) Parent age 55 wants to receive early retirement benefits
1) Parent is disabled
2) Parent has passed away
3) Parent has retired
If a parent passes away, is receiving retirement benefits, or is receiving disability benefits, a child may receive Social Security benefits, depending on their circumstances. There is a cap to the total family benefits that can be received. Regardless of when a worker wants to receive retirement benefits, a worker needs to be at least 62 years old to start receiving any retirement benefits.
What percentage of taxes goes towards Medicare for income up to $200,000 for individuals?
Choose the best answer.
1) 1.45%
2) 1.54%
3) 7.65%
4) 6.2%
1) 1.45%
1.45% is deducted for Medicare taxes for income up to $200,000 for individuals who are not self-employed.
To motivate individuals with a disabling condition to go back to work, Social Security will continue to pay a partial benefit to the individual for an extended period of time.
Choose the best answer.
True
False
False
Special work incentives provided by Social Security allow disabled persons to work for a period of time without reducing their benefits.
When a worker starts collecting Social Security retirement or disability benefits, other members of his or her family also may be eligible for payments. Which of the following family members can be paid benefits? (Check all that are true.)
1) A worker’s child who is 20 and working full time.
2) A worker’s spouse taking care of children who are 10 and 12 years old.
3) A worker’s child who is 17 and in high school.
4) A worker’s spouse who is 60 with no children.
2) A worker’s spouse taking care of children who are 10 and 12 years old.
3) A worker’s child who is 17 and in high school.
A worker’s children can get paid benefits if they are: unmarried and under age 18 under age 19, but in elementary or secondary school as a full-time student, or age 18 or older and severely disabled and the disability must have started before age 22. In addition, a worker’s spouse may be paid benefits at any age if he or she is caring for the individual’s child who must be under age 16 or disabled and receiving Social Security benefits.
Your client has confirmed that his Social Security benefit at FRA will be $2,550 per month. His spouse achieves her FRA at the same time. Her work record provides for a benefit of $824 per month. Her Social Security work record is low because she worked for most of her career in a municipal position in a state that has not opted into the Social Security system. She is eligible from that state for a pension of $1,491 per month. These clients want to know if you can provide an estimate of her spousal benefit at FRA. Her spousal benefit from Social Security will be which of the following?
Choose the best answer.
1) 0
2) $ 281
3) $ 876
4) $ 1,275
2) $ 281
Because her municipal income was not subject to Social Security taxes, the Government Pension Offset (GPO) applies to her spousal benefit. The GPO says that her spousal benefit of $1,275 (50% of her husband’s FRA) must be reduced by 2/3 of her pension of $994 ($1,491 × 66.66 = $994). Per the GPO, her spousal benefit is $281.00 per month ($1,275 − $994 = $281).
Edward is a carpenter who had net self-employment income last year of $76,000. His accountant is researching whether his quarterly self-employment tax payments of $2,000 will be enough to meet his obligations under the code. Which of the following would be the most accurate conclusion?
1) Edward underpaid and owes an additional $2,738 in self-employment taxes.
2) Edward underpaid and owes an additional $3,628 in self-employment taxes.
3) Edward overpaid self-employment taxes by $2,186 and will receive a refund in this amount.
4) Edward overpaid self-employment taxes by $2,631 and will receive a refund in this amount.
1) Edward underpaid and owes an additional $2,738 in self-employment taxes.
The first step to calculating self-employment taxes due is to deduct the employer portion of self-employment taxes, 7.65%, from Edward’s income: $76,000 × 0.9235 = $70,186. The full self- employment tax of 15.3% is then applied to this figure: $70,186 × 0.153 = $10738. Quarterly payments of $2,000 would result in an underpayment: $10,738 − ($2,000 × 4) = $2,738. Edward must pay an additional $2,738 in order to meet his obligations.
It has been suggested that the Social Security Trust Fund may be depleted sometime around 2034 based on current projections of future cash flows. Which of the following is NOT one of the possible solutions frequently discussed to resolve this future shortfall:
1) Increasing the Full Retirement Age
2) Reallocating the Trust Fund to higher yielding investments
3) Means Testing of Benefits
4) Revising the methodology for computing cost of living adjustments
Choose the best answer.
1) II and IV
2) II only
3) I only
4) III only
2) II only
Which of the following statements regarding Social Security eligibility criteria is/are true?
I) Credits required for disability and survivor benefits are lower for a 26 year old worker than for a 36 year old
worker.
II) Up to six credits may be earned in one year.
III) 40 credits must be earned to qualify for retirement benefits.
IV) One credit is earned for every $1,730 of earnings.
Choose the best answer.
1) I, II, and III
2) II and IV
3) I, III, and IV
4) All of the above
3) I, III, and IV
Your client, Simon, has been receiving benefits from a group disability insurance plan of $2,750 per month for the past 12 months. After a lengthy review process, he has been approved to receive Social Security disability benefits in the amount $1,100 per month. Once Simon’s Social Security benefits begin, what will be the total amount of monthly disability benefit income received by Simon?
Choose the best answer.
1) $1,100
2) $2,200
3) $2,750
4) $3,850
3) $2,750
The amount of the group disability benefit Simon receives will be reduced by the benefit he receives from Social Security, leaving him with the same amount of monthly disability income.
All of the following individuals would be eligible to receive Social Security survivor benefits EXCEPT:
Choose the best answer.
1) A recently disabled 32-year-old child
2) A disabled 53-year-old widower
3) A 61-year-old widow in good health
4) A 17-year-old dependent child
1) A recently disabled 32-year-old child
In order for a disabled child to receive a benefit, his or her disability must have begun before age 22.
Miranda worked as a teacher for 42 years before retiring last summer. Her career was divided between 23 years working in a private school, and 19 years working for a public school system. Miranda was not required to pay Social Security taxes when working in public schools, and is instead about to begin receiving a pension which she earned in her 19 years working in the public school system. Which of the following statements best describes the benefits Miranda will ultimately receive from Social Security:
Choose the best answer.
1) Miranda’s Social Security benefits will be subject to the full Windfall Elimination Provision reduction
2) Miranda’s Social Security benefits will be subject to a partial Windfall Elimination Provision reduction.
3) Miranda’s 23 years of work in a private school allow her to escape the Windfall Elimination Provision.
4) Miranda’s pension will only affect the amount of spousal and survivor benefits she may receive.
2) Miranda’s Social Security benefits will be subject to a partial Windfall Elimination Provision reduction.
